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Best Practices for Procurement

Description of Risk

If campus units do not follow good purchasing practices, they may violate state laws, rules, or regulations, and expend funds in an uneconomical manner.

Criteria

Procurement and Business Services, under the direction of the Associate Vice President for Financial Services, is responsible for the procurement of all materials, supplies, equipment and services required by all departments and units of the Georgia Institute of Technology. This responsibility includes, but is not limited to, the following:

Establishing all purchase contracts, except rentals, purchase of real property, or facility contracts (architects, construction, etc.) entered into on behalf of the Institute for all supplies, materials, equipment, and services. These include, but are not restricted to, equipment, supplies, printing, surveys and consultant services.

Assuring that all purchases made are properly authorized and result in proper quality goods or services being delivered to the designated location, at the right time, in the right quantity, and at the best possible cost.

Maintaining and operating a Central Receiving Department which has the responsibility of receiving, checking, and redelivery of supplies, equipment, and materials ordered for the campus that are not shipped directly from the vendor to the department requisitioning the order. This unit also controls the return of merchandise for reasons as necessary.

Guidance for the performance of these functions and responsibilities is provided from several sources.
The primary authorities are:

The Department of Administrative Services, the Agency empowered by the Purchasing Act, State of Georgia Annotated Code 50-5.

Auditor’s Overview

The importance of this subject is to ensure that campus units understand and follow the appropriate procurement procedures. There are several types of procurement that may be accomplished by campus units.
These include:

Procurement card (PCard)

Departmental Purchase Order (DPO)

Petty Cash

Those via contract through procurement services.

The procurement source utilized is based upon the dollar amount of purchase and/or type of purchase.

Best Practices

Gain a working knowledge of procurement policies and procedures

Attend procurement training

Develop internal policies and procedures on procurement and disseminate.

Empower PCard Coordinators with the responsibility and authority to oversee this process

Empower one person as the unit’s central authority for handling invoices and DPO’s

Empower one person as the unit’s petty cash fund custodian

Ensure that petty cash is adequately secured

Petty cash should be subject to proper supervisory oversight

Retain all appropriate supporting documentation to validate the authenticity of the transaction and to make it available for audit and/or review if requested

Process

Delegate and Communicate

Unit head should designate an individual within the unit as the unit’s Departmental Procurement Coordinator, responsible for the overall process; a PCard Coordinator, a Petty Cash Custodian, and communicate this decision to the entire unit. Delegation of this authority does not relieve the unit head of ultimate responsibility for this activity. He or she should develop managerial assurance that the unit is in compliance with internal and Institute policies and procedures regarding these areas. This may be accomplished by instituting a feedback mechanism so that regular reports are directed to the unit head on a periodic basis. The unit should examine the purpose of the petty cash fund annually. The examination should answer such questions as: Why do we have petty cash? Could we accomplish the same thing using the PCard system? Are the funds properly secured? Is the dollar amount of the fund too high or too low? Who is handling the fund? Should this responsibility be rotated?

All procurement activity should be reconciled to the accounts payable information for the unit.

While the Institute requires PCard Coordinators to attend formal training, training for all PCard holders is important. Online training can be found at: http://www.trainsweb.gatech.edu

Hotline

To anonymously report unethical behavior such as fraud, waste, or abuse related to the Institute, contact EthicsPoint at: